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Gave Myself a $400+ Raise

September 25th, 2012 at 02:06 am

Well, the truth is it feels like a raise. Today I signed the papers for refinancing two rentals that are my sole and separate property. I have been thinking about it for several years but dragged my feet, mainly because I didn't want to deal with B of A (the current lender), and home values had dropped dramatically. But values are finally creeping up again.

I remembered the name of the loan broker I used when I bought the houses. He used to be with Countrywide (now B of A) but is now w/ a small mortgage company. He was able to get a rate of 3.625% locked in with no points. This is an excellent rate for investment property. I also decided to have impounds because it makes life easier for me. I will no longer have to deal with tax bills or annual insurance premiums... only HOA fees.

It will take about 15 months to recover the closing costs but after that I will have about $447 a month net, after paying for property management and reserving funds for HOA fees to be paid twice a year. Wish I'd done it sooner, especially since I've had a negative cash flow of ~$65 a month.

The cash flow will come in handy... we are expecting out first grandchild (a boy) early next year and I will want to start a college savings account. It's never too early!

4 Responses to “Gave Myself a $400+ Raise”

  1. Ima saver Says:

    Good for you!

  2. Retirement Tips Says:

    Excellent article and it shows that many of us don't take action because it takes time and it means changing the way we do things. It's really nice to see you took action and you shared your experience too here. This will help others in the similar situation to take action.

  3. Jerry Says:

    Oh, that is a great rate for an investment property! We are hoping to re-fi our house back in the States, but have been holding off because the rates for investment properties do not lead to the same levels as primary residences. It's go to be nice to have some insurance of a locked-in rate, too. Sounds like a good broker!
    Jerry

  4. team of professional writers Says:

    Good for you! I have some news like this too. But mine are from the other sphere. Nevertheless, it's the same in terms of benefit.

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